Cognizant Technology Solutions Corp. (CTSH) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Nu Holdings Ltd.

Workday, Inc.

Accenture Plc

Cisco Systems, Inc.

Fortinet, Inc.

Cognizant Technology Solutions Corp.

Broadridge Financial Solutions, Inc.

Cloudflare, Inc.

CDW Corp.

International Business Machines Corp.

Block, Inc.

Why is Cognizant Technology Solutions Corp. ?

High Management Efficiency with a high ROE of 17.01%

The company is Net-Debt Free

Poor long term growth as Operating profit has grown by an annual rate 7.57% of over the last 5 years

Positive results in Mar 26

OPERATING CASH FLOW(Y) Highest at USD 2,757 MM
DIVIDEND PER SHARE(HY) Highest at USD 4.84
INTEREST COVERAGE RATIO(Q) Highest at 13,685.71

With ROE of 14.85%, it has a attractive valuation with a 1.90 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -50.17%, its profits have fallen by -4.3%

High Institutional Holdings at 100%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Below par performance in long term as well as near term

Along with generating -50.17% returns in the last 1 year, the stock has also underperformed S&P 500 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Cognizant Technology Solutions Corp. should be less than 10%
Overall Portfolio exposure to Computers - Software & Consulting should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Computers - Software & Consulting)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Cognizant Technology Solutions Corp. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Cognizant Technology Solutions Corp.

-50.17%

-1.20

35.40%

S&P 500

20.53%

1.55

13.24%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

4.86%

EBIT Growth (5y)

7.57%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.08

Sales to Capital Employed (avg)

1.32

Tax Ratio

24.19%

Dividend Payout Ratio

27.19%

Pledged Shares

Institutional Holding

100.00%

ROCE (avg)

25.03%

ROE (avg)

17.01%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.90

EV to EBIT

8.16

EV to EBITDA

7.01

EV to Capital Employed

1.98

EV to Sales

1.30

PEG Ratio

Dividend Yield

222.77%

ROCE (Latest)

24.26%

ROE (Latest)

14.85%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Dow Theory

No Trend

Mildly Bearish

OBV

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

8What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 2,757 MM

DIVIDEND PER SHARE(HY)

Highest at USD 4.84

INTEREST COVERAGE RATIO(Q)

Highest at 13,685.71

EPS(Q)

Highest at USD 1.39

-3What is not working for the Company

CASH AND EQV(HY)

Lowest at USD 3,431 MM

DEBTORS TURNOVER RATIO(HY)

Lowest at 4.84 times

OPERATING PROFIT MARGIN(Q)

Lowest at 17.7 %

Here's what is working for Cognizant Technology Solutions Corp.

Operating Cash Flow

Highest at USD 2,757 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Interest Coverage Ratio

Highest at 13,685.71

in the last five periods

MOJO Watch

The company's ability to manage interest payments is improving

Operating Profit to Interest

Dividend per share

Highest at USD 4.84 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (USD)

EPS

Highest at USD 1.39

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (USD)

Depreciation

Highest at USD 141 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (USD MM)

Here's what is not working for Cognizant Technology Solutions Corp.

Operating Profit Margin

Lowest at 17.7 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Cash and Eqv

Lowest at USD 3,431 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debtors Turnover Ratio

Lowest at 4.84 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio